VOIP will not trump traditional voice

Ovum’s research shows a shift in telephony – rather than the extinction of traditional voice.

A recent report by research firm Ovum reveals that while over-the-top (OTT) voice over IP (VOIP) solutions will cost telecommunications providers, the data-based technology is not about to spell their demise.

According to Ovum, OTT VOIP will cost the global telecoms industry $479 billion over the next eight years – 6.9% of cumulative total voice revenue. However, says Ovum, these services will not replace traditional telephony.

New research into the “future of voice” provides some reassurance to operators that are fearful of the demise of traditional telephony. It suggests that, although revenues continue to fall, voice traffic is simply shifting rather than collapsing.

“Where operators have seen voice telephony as a service without a future, they have chosen to compete on price in an effort to eke out any remaining revenues from the market,” says Jeremy Green, principal telecoms strategy analyst at Ovum.

Ovum also sees the continued existence of the telephone number as a key asset for telcos as it is central to their relationships with their customers.

“The major threat posed by OTT VOIP is that it weakens customers’ attachment to their telephone number and transfers their attachment to a new address,” notes Green. He says this may turn out to be a more significant factor than the direct impact on telephony revenues.

“Operators should use telephone numbers as the identifier and address for cloud-based services, allow customers to choose numbers that are relevant to them, and develop more application-to-person SMS applications.”

Arthur Goldstuck, MD of World Wide Worx, says in SA voice revenue for mobile networks is stagnant, rather than dying. “Voice is not falling, but it is not growing either – or at least it is growing at a marginal rate of about two to three percent.”

On the flipside, says Goldstuck, data is growing at about 30% and SMS at a rate of 6%.